Sources say IBM to drop Windows-based storage

IBM Corp. plans to discontinue its line of Windows-based network-attached storage (NAS) devices in order to focus on higher-end products, including an upcoming file server that will run Linux, sources said this week.

The sources said IBM has told them it plans to announce this month that it will stop making its TotalStorage NAS 100 and NAS 200 filers, which were designed for departmental, workgroup and low-end corporate applications. The boxes offer storage capacities of 480GB and 7TB, respectively.

According to the sources, IBM will continue to sell its NAS Gateway 300 system, which connects servers and PCs on IP networks to storage-area networks (SAN) that are based on Fibre Channel technology. In addition, the company plans to offer a Linux-based NAS device, most likely by late this year.

IBM officials declined to comment, describing the information about its plans as “speculation.”

A spokesperson for Microsoft Corp., which develops the Windows Powered NAS software used by IBM and other storage vendors in their Windows-based devices, also wouldn’t comment in detail.

“IBM’s plans are IBM’s,” the spokesperson said. “But we have a wide range of OEMs that continue to expand (their NAS offerings).”

IBM announced the NAS 200 in June 2001 and added the lower-cost NAS 100 last July as part of a plan to compete on a wider basis with rivals such as EMC Corp. and Hewlett-Packard Co.

John McArthur, an analyst at International Data Corp. in Framingham, Mass., said IBM is making the right decision by pulling out of the low-end NAS space, noting that while it’s a high-volume business, it generates relatively low revenues. “IBM wants to own the data centre, the midrange and high-end market. They’re not trying to capture the low-end, high-volume market,” he said.

“This is no blow to Microsoft,” he said.

Pushan Rinnen, an analyst at Gartner Inc. in Stamford, Conn., said sales of IBM’s low-end NAS line haven’t taken off in any big way. NAS 100 sales totaled US$3.4 million last year, only three per cent of the entry-level NAS market, according to Gartner’s figures. “The volume is not high enough (for IBM) to be a strategic player,” Rinnen said.

The NAS 200 and the NAS Gateway 300 have done better, she said, adding that the NAS-to-SAN gateway device was third behind products from EMC and HP in its market niche last year. But Rinnen said IBM placed sixth in the overall NAS business during 2002, with about US$40 million in sales and a three per cent market share.

Until now, the top storage vendors have been steadily falling in line with Microsoft and rolling out products based on Windows Powered NAS.

Hopkinton, Mass.-based EMC in May gave up its standing as the last major holdout by announcing plans to use the Microsoft technology in a new line of low-end NAS devices based on the hardware from its Clariion CX midrange disk arrays.

As for whether IBM is planning on building a high-end NAS device based on Linux, McArthur declined to comment. But he did say that “it is reasonable to expect IBM will continue to invest in technology that will allow them to capture the midrange and high-end opportunities. And Linux is not the only option at the high end.”

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